Germany's DVB Bank SE has
sued aviation regulator Directorate General of Civil Aviation (DGCA) and
Kingfisher Airlines to have two planes it financed for the troubled carrier
deregistered, a possible first step towards recouping its funds.
The case underlines the
problems that leasing firms and financing companies face in recovering grounded
planes from Kingfisher, as airports, banks and tax authorities scramble for the
crisis-hit carrier's assets.
International Lease Finance
Corp (ILFC) - owned by U.S. insurer AIG - is also struggling to take back
Kingfisher planes it owns, one of which, an Airbus A-320, has been impounded by
tax authorities for non-payment of dues by the carrier.
The DGCA must deregister
the DVB-financed Airbus planes, now parked in Istanbul, before the bank can put
them to use or lease them out.
"Our main trouble
really is with the DGCA, which should deregister the aircraft," Carsten
Gerlach, senior vice president of aviation finance at DVB, told Reuters.
"We have now filed a
writ petition at the High Court in Delhi against DGCA and also Kingfisher,
strictly focused on deregistration," Gerlach said by phone from Frankfurt.
However, the DGCA argues
that those aircraft were not financed by DVB alone, so deregistering them would
make the DGCA answerable to other financiers, who are also trying to recover
their money, according to a senior government source with direct knowledge of
the situation.
The DGCA and Kingfisher did
not respond to requests for comment.
Meanwhile, leasing company
IFCL has also asked the DGCA to deregister four Kingfisher-operated planes, but
it faces separate obstacles.
These planes include an
Airbus A-320 parked at Mumbai airport that was impounded by tax authorities
last week after the carrier failed to settle long-pending dues.
"People just go the
airport, see a plane in Kingfisher colours, and stake their claim on it,"
the source said, referring to the tax authorities' impounding of the Airbus.
"What they don't
understand is that the plane may not belong to Kingfisher at all."
Kingfisher, owned by
flamboyant liquor baron Vijay Mallya, has hit back at the tax authorities'
actions, saying it is illegal for authorities to seize aircraft that are owned
by foreign lessors.
"This will send a very
wrong signal to any foreigner who wishes to do business in the aviation
industry in India," the airline said in a statement last week.
Kingfisher has 33 scheduled
passenger planes registered in India, according to data from the DGCA. It had a
fleet of 64 a year back, when it was India's No. 2 carrier by market share.
It is saddled with a
combined debt load of $2.5 billion, according to one estimate, and has not paid
salaries for months.
Kingfisher, which has not
flown since October, had its license suspended in October after months of
canceled flights and staff walkouts.
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